Insurance Reserves and Policyholder Funds

12 Months Ended

Dec. 31, 2023

Insurance Reserves and Policyholder Funds [Abstract]

Insurance Reserves and Policyholder Funds

Note 6. Insurance Reserves and Policyholder Funds

The following table presents the Company’s reserves for life, accident and health, and property and casualty losses, claims and loss adjustment expenses at December 31, 2023 and 2022.

					Amount of Insurance In Force, Net
	2023		2022		2023		2022
Future policy benefits
Life insurance policies:
Ordinary life and annuities	$	50,040	$	50,660	$	172,907	$	186,863
Group life		11,917		2,533		633,017		474,150
		61,957		53,193	$	805,924	$	661,013
Accident and health insurance policies		30,538		32,371
		92,495		85,564
Unearned premiums		31,317		28,348
Losses, claims and loss adjustment expenses		87,478		87,484
Other policy liabilities		1,132		1,255
Total insurance reserves and policyholder funds	$	212,422	$	202,651

Annualized premiums for accident and health insurance policies were $84,127 and $89,471 at December 31, 2023 and 2022, respectively.

Future Policy Benefits

Liabilities for future benefits on life insurance policies and accident and health insurance policies are based on assumed investment yields, mortality rates, disablement rates, benefit utilization rates, and lapse rates after giving effect to possible risks of unexpected adverse claim experience. The mortality, disablement rates, benefit utilization rates, and lapse assumptions are based upon the Company’s experience and incorporate a margin for adverse experience development.  These assumptions are modified as necessary to reflect anticipated trends and are generally established at contract inception.  The interest rates assumed, which reflect future investment yields at the time policies are issued, are generally: (i) 2.5% to 5.5% for issues prior to 1977, (ii) 5.5% to 7.0% for 1977 through 1979 issues, (iii) 9.0% for 1980 through 1987 issues, (iv) 5.0% to 7.0% for 1988 through 2009 issues, and (v) 3.0% to 4.0% for 2010 through 2023 issues.

Loss and Claim Reserves

Loss and claim reserves represent estimates of projected ultimate losses and are based upon: (a) management’s estimate of ultimate liability and claims adjusters’ evaluations for unpaid claims reported prior to the close of the accounting period, (b) estimates of incurred but not reported (“IBNR”) claims based on past experience, and (c) estimates of loss adjustment expenses. The estimated liability is periodically reviewed by management and updated, with changes to the estimated liability recorded in the statement of operations in the year in which such changes are known.

Activity in the liability for unpaid loss and claim reserves is summarized as follows:

	2023			2022
Balance at January 1	$	87,484		$	85,620
Less: Reinsurance recoverable on unpaid losses		(17,647	)		(17,690	)
Net balance at January 1		69,837			67,930
Incurred related to:
Current year		113,246			125,754
Prior years		1,418	(1)		(4,228	)(2)
Total incurred		114,664			121,526
Paid related to:
Current year		67,484			82,002
Prior years		44,217			37,617
Total paid		111,701			119,619
Net balance at December 31		72,800			69,837
Plus: Reinsurance recoverable on unpaid losses		14,678			17,647
Balance at December 31	$	87,478		$	87,484

(1) Prior years’ development was primarily the result of unfavorable development in the automobile liability line of business in the property and casualty operations due to inflationary factors.

(2) Prior years’ development was primarily the result of favorable development in the Medicare supplement line of business in the life and health operations, as well as favorable development in the surety line of business in the property and casualty operations.

Following is a reconciliation of total incurred losses to total insurance benefits and losses incurred:

	2023		2022
Total incurred losses	$	114,664	$	121,526
Cash surrender value and matured endowments		1,323		1,598
Benefit reserve changes		6,513		332
Total insurance benefits and losses incurred	$	122,500	$	123,456

Liability for Unpaid Losses, Claims and Loss Adjustment Expenses

The following is information, by significant product lines, about incurred and paid claims development as of December 31, 2023, net of reinsurance, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included within the net incurred claims amounts. The information presented for the years ended December 31, 2015 and prior is presented as supplementary information and is unaudited.

Medicare Supplement

	For the Years Ended December 31,																				As of December 31, 2023
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	57,179	$	56,938	$	56,981	$	56,981	$	56,976	$	56,977	$	56,976	$	56,976	$	56,976	$	56,976	$	—		940
2015				55,482		54,939		54,993		54,990		54,984		54,985		54,985		54,985		54,985		—		898
2016						58,849		59,851		63,226		63,225		63,221		63,221		63,221		63,221		—		1,037
2017								67,960		69,655		69,643		69,635		69,633		69,633		69,632		—		1,512
2018										79,140		80,404		80,361		80,357		80,351		80,348		—		2,052
2019												88,765		87,028		86,988		86,986		86,980		—		2,246
2020														75,857		75,715		75,730		75,730		14		1,853
2021																65,267		61,579		61,785		52		1,771
2022																		58,777		56,047		239		2,103
2023																				48,367		11,979		1,864
																			$	654,071

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	48,024	$	56,938	$	56,981	$	56,981	$	56,976	$	56,977	$	56,976	$	56,976	$	56,976	$	56,976
2015				45,430		54,876		54,993		54,990		54,984		54,985		54,985		54,985		54,985
2016						49,165		59,747		63,226		63,225		63,221		63,221		63,221		63,221
2017								57,696		69,517		69,643		69,635		69,633		69,633		69,633
2018										66,565		80,222		80,361		80,355		80,351		80,348
2019												72,333		86,856		86,978		86,985		86,980
2020														63,129		75,527		75,710		75,715
2021																50,197		61,350		61,733
2022																		46,111		55,808
2023																				36,388
																			$	641,787
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	12,284

The cumulative number of reported claims for the Medicare Supplement line of business is the number of distinct claims incurred and submitted to the Centers for Medicare and Medicaid Services (or its designee) for payment in the given year. Multiple payments on the same claim are not counted in the claim frequency data. Estimated ultimate claims incurred, using claims data reported during each month of any given year, are calculated using the chain ladder method modified to reflect seasonality by trend-adjusting expected claims for the most recent four-month period prior to the statement date. Additional adjustments to the estimated ultimate claims incurred are then applied to account for seasonal changes in claim experience and changes in the rate of claim processing. The IBNR is calculated as the estimated ultimate claims less the total of paid claims through the valuation date and claims in the course of settlement as of the valuation date. Thirty-six months of loss data are used to develop the estimated ultimate incurred claims. For other accident and health products that have very small claim volumes, similar approaches are used and modified to reflect the unique aspects of the products.

Automobile Liability

	For the Years Ended December 31,																				As of December 31, 2023
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	20,812	$	21,881	$	22,041	$	22,353	$	21,682	$	22,080	$	22,100	$	22,125	$	22,165	$	22,095	$	—		3,560
2015				18,521		19,857		20,017		20,007		20,086		20,680		20,849		20,955		21,021		—		3,537
2016						20,549		21,275		21,846		22,388		22,245		22,310		22,448		22,448		—		3,862
2017								22,179		24,212		23,766		25,180		26,009		26,153		26,231		1		3,813
2018										24,284		25,682		27,338		30,013		30,464		31,135		323		3,651
2019												25,241		24,045		25,724		28,042		28,513		397		3,606
2020														22,416		16,442		20,137		21,164		1,010		2,517
2021																25,887		21,172		24,957		1,899		2,774
2022																		28,860		27,293		3,093		2,845
2023																				33,266		16,714		2,558
																			$	258,123

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	6,822	$	13,807	$	17,554	$	20,177	$	20,878	$	21,735	$	21,813	$	21,786	$	21,958	$	22,095
2015				6,226		11,878		14,938		17,612		19,557		20,234		20,726		20,904		21,021
2016						6,796		13,141		16,397		19,613		21,408		21,809		22,448		22,448
2017								7,401		16,317		20,221		22,778		25,023		25,712		26,222
2018										6,989		15,647		21,121		24,662		27,671		29,201
2019												7,305		14,694		19,384		22,868		26,126
2020														5,172		9,941		14,693		18,133
2021																6,242		13,918		19,230
2022																		7,023		18,010
2023																				9,068
																			$	211,554
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	46,569

Automobile Physical Damage

	For the Years Ended December 31,										As of December 31, 2023
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance										IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2019		2020		2021		2022		2023
2019	$	8,526	$	8,026	$	7,914	$	7,881	$	7,873	$	1		1,495
2020				10,288		10,080		10,047		10,024		3		1,642
2021						14,296		13,385		13,305		4		1,900
2022								10,962		10,648		33		1,756
2023										6,460		96		1,401
									$	48,310

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2019		2020		2021		2022		2023
2019	$	6,360	$	8,005	$	7,906	$	7,867	$	7,866
2020				8,347		9,952		10,008		9,992
2021						11,993		13,277		13,257
2022								8,475		10,368
2023										5,397
									$	46,880
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance									$	1,430

General Liability

	For the Years Ended December 31,																				As of December 31, 2023
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves			Cumulative Number of Reported Claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	3,744	$	501	$	557	$	476	$	406	$	497	$	523	$	519	$	511	$	514	$	2			207
2015				4,421		1,037		1,227		1,044		867		855		855		870		870		—			149
2016						3,119		1,148		736		608		621		619		620		620		—			94
2017								1,490		488		513		738		738		839		777		—			84
2018										1,656		333		198		128		183		183		—			76
2019												1,916		707		455		515		909		117			95
2020														2,223		670		657		363		(66	)		89
2021																2,567		1,329		1,328		215			102
2022																		2,770		2,380		634			122
2023																				2,887		1,906			87
																			$	10,831

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	171	$	299	$	331	$	369	$	373	$	493	$	498	$	502	$	502	$	505
2015				98		259		464		664		863		855		855		854		854
2016						116		203		568		608		617		619		620		620
2017								75		136		365		556		696		741		777
2018										65		90		115		128		183		183
2019												41		209		242		354		404
2020														208		385		462		539
2021																364		646		813
2022																		402		1,169
2023																				125
																			$	5,989
All outstanding liabilities before 2014, net of reinsurance																				341
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	5,183

Surety

	For the Years Ended December 31,																				As of December 31, 2023
	Incurred Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance																				IBNR Reserves		Cumulative Number of Reported Claims
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	3,214	$	3,130	$	2,990	$	2,760	$	2,685	$	2,617	$	2,818	$	2,782	$	2,852	$	2,592	$	4		54
2015				1,902		1,630		1,400		1,359		1,406		1,310		1,307		1,280		1,279		—		50
2016						3,314		1,812		1,865		1,876		1,865		1,678		1,670		1,666		—		47
2017								4,677		3,671		3,799		3,629		3,514		3,440		3,448		8		67
2018										3,528		1,938		1,381		956		767		750		—		64
2019												2,130		657		630		513		507		11		32
2020														2,263		574		465		460		—		23
2021																2,936		1,455		1,497		—		35
2022																		3,202		2,339		72		50
2023																				2,634		1,590		108
																			$	17,172

	Cumulative Paid Losses, Claims and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2014		2015		2016		2017		2018		2019		2020		2021		2022		2023
2014	$	1,331	$	2,327	$	2,727	$	2,739	$	2,664	$	2,593	$	2,562	$	2,562	$	2,568	$	2,570
2015				641		856		1,127		1,125		1,128		1,271		1,273		1,279		1,279
2016						1,054		1,732		1,772		1,873		1,862		1,677		1,670		1,666
2017								1,971		3,255		3,523		3,545		3,442		3,402		3,400
2018										1,157		1,454		1,361		941		760		749
2019												259		395		568		446		444
2020														97		460		464		459
2021																156		803		1,496
2022																		970		2,191
2023																				98
																			$	14,352
All outstanding liabilities before 2014, net of reinsurance																				33
Liabilities for losses, claims and loss adjustment expenses, net of reinsurance																			$	2,853

For the property and casualty lines of business, the number of claims presented above equals the number of occurrences by type of claim reported to the Company. The number of claims reported during a given year corresponds to the number of claims records opened during the year. Frequency information is maintained on a cumulative basis by accident year by line of business. For automobile claims, a claim count is separately maintained for bodily injury, property damage and physical damage claims. The Company has consistently monitored claim frequency on this basis, and believes this provides more meaningful information than using claimant count which can change over the course of settling a claim.

In general, when a claim is reported, claims representatives establish a “case reserve” for the estimated amount of the ultimate payment based on the known information of the claim at that time. Claims managers review and monitor all property and casualty claims in excess of $25,000. As new information becomes available or payments are made on a claim, the case reserve is adjusted to reflect the revised estimate of the ultimate amount to be paid out. Estimates and assumptions pertaining to individual claims are based on complex and subjective judgments and subject to change at any time as new information becomes available.

In addition to case reserves, IBNR reserves are established to provide for claims which have not been reported to the Company as of the reporting date as well as potential adverse development on known case reserves. IBNR reserve estimates are derived through a number of analytical techniques. Actuarial data is analyzed by line of business, coverage and accident year. Qualitative factors are also considered in determining IBNR reserves and include such factors as judicial decisions, general economic trends such as inflation, changes in policy forms, and underwriting changes. Reserves are reviewed quarterly and any indicated adjustments are made.

Because of the inherent uncertainties in establishing both case and IBNR reserves, ultimate loss experience may prove better or worse than indicated by the combined claim reserves. Adjustments to claim reserves are reflected in the period recognized and could increase or decrease earnings for the period.

The following is supplementary information about average historical claims duration as of December 31, 2023.

	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Reserve Line	1st Year			2nd Year			3rd Year			4th Year			5th Year			6th Year			7th Year			8th Year			9th Year			10th Year
Medicare Supplement		81.9	%		17.1	%		0.2	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Automobile Liability		26.9	%		29.8	%		17.3	%		12.6	%		8.3	%		3.3	%		1.9	%		0.2	%		0.7	%		0.6	%
Automobile Physical Damage		83.5	%		16.1	%		-0.3	%		-0.3	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
General Liability		21.9	%		22.2	%		21.2	%		14.6	%		13.1	%		5.7	%		1.4	%		0.2	%		0.0	%		0.6	%
Surety		50.4	%		41.5	%		14.5	%		-10.6	%		-5.1	%		-1.1	%		-0.4	%		0.1	%		0.1	%		0.1	%

The reconciliation of the net incurred and paid claims development tables to the liability for losses, claims and loss adjustment expenses is as follows:

	December 31, 2023
Net outstanding liabilities
Medicare Supplement	$	12,284
Automobile Liability		46,569
Automobile Physical Damage		1,430
General Liability		5,183
Surety		2,853
Other short-duration insurance lines		2,391
Liabilities for unpaid losses, claims and loss adjustment expenses, net of reinsurance		70,710
Reinsurance recoverable on unpaid losses:
Medicare Supplement		8,263
Automobile Liability		3,870
Automobile Physical Damage		303
General Liability		2,242
Other short-duration insurance lines		—
Total reinsurance recoverable on unpaid losses		14,678
Unallocated claims adjustment expenses		2,090
Total gross liability for unpaid losses, claims and loss adjustment expenses	$	87,478